Almost everyone needs estate planning. Why? Well, because nearly everyone has an estate! Your estate is made up of all things that you own. It may consist of your house, car, life insurance, savings account, jewellery, and other property, both real and personal. Estate planning involves making a decision ahead of time on exactly who is to benefit from your estate when you die, and to what extent. It can either start with a will or a living trust.
Read on below to find out the difference between these two commonly used estate planning terms.
A will provides instructions as to how you want your estate distributed when you pass on. Before your estate can be distributed to your beneficiaries, however, your will must go through probate. The probate process in Australia varies significantly from state to state, so your will will be subject to your state's probate process — if you have property in other states titled in your name, your heirs will probably go through several probates, each one in accordance with the laws in that particular state. Estate planning via a will can become costly with legal fees, court costs and executor fees.
A Living Trust
When you establish a living trust, you're basically transferring ownership of your property to a trust. The individual appointed to manage your estate on behalf of your heirs under the trust arrangement is known as a trustee. Unlike wills, living trusts are not subject to the probate process and they take effect immediately after they have been signed. This means a trustee will manage your estate while you are still alive and even after you die. They will transfer your property and assets to the beneficiaries at the time you had intimated. A living trust can come in handy when it comes to providing for an heir with special needs, protecting property and assets from heirs' creditors, protecting heirs from irresponsible spending, etc.
Unfortunately, a lot of people die without planning their estate planning because of various reasons. They may think: they're not wealthy enough; they're still too young; they're too busy; or they've still got plenty of time to do so. Others simply feel confused and don't know who they can turn to for help. If you have not yet planned your estate, it is important that you do so now! A probate lawyer that is experienced in estate planning can help you in this regard. Don't let those you love and care about pick up the pieces once you're gone. Click here for more about this topic.